 |
| Nonferrous Market |
Global Nonferrous Markets Begin 2026 with Dramatic Swings
Copper and aluminum scrap markets have started 2026 with notable volatility. Copper prices nearly reached record highs in mid-January but softened later in the week. Meanwhile, aluminum, zinc, and nickel also experienced short-term gains, which were quickly reversed. Therefore, market participants should anticipate continued fluctuation, reflecting 2025’s precedent.
Scrap processors in the U.S. Midwest note that copper price swings on Comex versus London Metal Exchange (LME) drove significant arbitrage opportunities last year. Section 232 tariffs influenced these movements, narrowing spreads between U.S. and global copper pricing. As a result, domestic scrap buyers face higher prices, prompting exporters to prioritize shipments to India, Japan, and South Korea.
Recycled Copper and Aluminum: Supply Dynamics and Domestic Trends
Demand for recycled copper remains strong globally, although U.S. demand appears weaker. High-grade copper scrap, such as bare bright No. 1, increasingly flows to overseas markets. Winter conditions may slightly hinder collection, yet processors expect overall higher material intake in 2026. Meanwhile, primary aluminum scrap underperforms due to oversupply, while secondary aluminum remains flat. As a result, companies exercise caution in establishing long-term domestic supply contracts.
The Midwest aluminum premium has surged from $0.40 per pound to nearly $1, driven by Section 232 tariffs and LME price increases. Prime aluminum has risen consistently since May 2025, yet recycled aluminum faces challenges from oversupply and localized production disruptions. These dynamics highlight the nuanced interplay between tariffs, premiums, and scrap flow within North America.
ScrapInsight Commentary
Copper and aluminum scrap markets demonstrate continued volatility in 2026, influenced by tariffs and global arbitrage. Export flows of high-grade copper to Asia are rising, while domestic U.S. demand remains subdued. The ongoing premium adjustments and production disruptions suggest that recycling economics will increasingly favor strategic export and selective supply management.
